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Ronald Reagan called it America’s Strategic Defence Initiative. Others called it “Star Wars” as Washington extended the Cold War into space.

Now, more than 35 years later, Washington is once again extending its military horizon beyond the planet.

Donald Trump has called for “American dominance in space” with a vision that appears even more ambitious than that of his predecessor.

He has proposed establishing a “Space Force” which, should it be endorsed by the US Congress, will be America’s sixth military service.

The US aerospace industry hopes to cash in on what would be the first defence service to be created since the establishment of the US Air Force in August 1947. But there is some debate over how extensive the new opportunities will be for major contractors. The Pentagon has been working with the industry on a lot of the technology for some time.

The Defence Advanced Research Projects Agency (Darpa) has been burrowing away for years – albeit with a far lower profile than The National Aeronautics and Space Administration (Nasa) – on an array of futuristic projects.

Darpa has worked with Boeing to produce a reusable spaceplane, known as the Phantom Express.

Because it requires far less time on the launch pad, it will give “aircraft-like” access to space, Boeing says. This has the virtue of making it possible to deploy small satellites in space swiftly should the need arise. Then there is hypersonic technology, developing missiles capable of flying at five times the speed of sound.

America fears being left behind in the hypersonic race and US vice president Mike Pence has warned that China and Russia are investing heavily in hypersonics. Washington’s response has been to award a $480m (£373m) contract to Lockheed Martin to work on a similar weapon. Boeing is reportedly also investing in the technology.

Ron Epstein, a defence analyst with Bank of America Merrill Lynch, believes the administration’s plans can be seen as a direct descendant of Reagan’s Strategic Defence Initiative.

“I think it is reasonable to assume there were a few people left working on it and maybe it has been pulled out from a filing cabinet. There has already been a lot of focus on hypersonics and how that relates to space. If an enemy has hypersonic weapons, then it is a case of how you deal with that.”

The one snag, faced by the US and its rivals, is the 1967 Outer Space Treaty, which says exploration should only be for peaceful purposes.

“It gets you into interesting territory because the weaponisation of space is an open question. But if you are a military planner you have to plan for every contingency.”

Although defence industries have been faring well for some time, they could still benefit from the plans, he adds. “This is good because it breaks it out from the rest of the budget and identifies it as an item to fight for.

“If you look at the major players in the US, most of them have divisions that can participate in this. The companies can all get a piece of it, but there is not one that can do all of it. So the question is how big a chunk can you get and what technology can you bring to the party.”

He believes that companies could cooperate and there could also be some mergers as the defence industry tries to capitalise on the opportunities.

There is evidence of this happening already, with Northrop buying rocket maker Orbital in a $7.8bn deal earlier this year. Exactly how much the US defence department is already spending on space is a matter of debate. According to figures released earlier this year, the Pentagon will spend $11.4bn this year.

A Bloomberg analysis puts the figure at $4bn, with much of the money going to companies such as Boeing, Lockheed Martin and Elon Musk’s SpaceX.

There is little doubt Trump’s administration is taking space seriously, with Heather Wilson, the Air Force Secretary, saying it is essential “to be able to deter, defend and prevail against anyone who seeks to deny our ability to freely operate in space”.

Not surprisingly, Boeing and Lockheed are among the companies identified by Robert Spingarn, Credit Suisse’s aerospace analyst, as likely beneficiaries should the scheme become a reality. In a note to investors, he also identifies Northrop Grumman, Raytheon and Maxar Technologies as potential winners. In a recent earnings call, Dennis Muilenburg, Boeing’s chief executive, made it clear that he expects the company to win new business.

“On Space Force – and more broadly, on the space business – I’m very encouraged by what I see as the administration leaning forward on investing in space,” he said. “It’s good for business. It creates growth opportunities for us.”

But one analyst questions whether Space Force will ever get off the ground as a separate project, despite the bullish noises made by the president. “This is not a change that the president can unilaterally impose,” says Loren Thompson, the chief operating officer with the Lexington Institute, a defence-focused think tank.

“It will require the approval of Congress, where the proposal will encounter headwinds. So don’t assume Space Force is a done deal.” There are already signs that the Senate is unlikely to rubber-stamp the proposals, given the cost implications.

Normally loyal Republican senator Joni Ernst is among those questioning the scheme. “How do we make sure we’re protecting taxpayer dollars and making sure they’re most efficiently used while achieving that objective?” she asked. Thompson believes that the plans might have to be tweaked. “The new Space Force might become coequal with the Air Force within the Department of the Air Force, in much the same way that the Marines are coequal with the Navy within the Department of the Navy.” That could see the plans scaled down, but there is still money to be made by the industry.

“A military service focused exclusively on space would inevitably place a higher priority on satellites, launch vehicles and ballistic missiles than today’s Air Force does. In descending order of revenues, the big winners are Lockheed Martin, Boeing, Northrop Grumman, SpaceX and Aerojet Rocketdyne.

“This could have the biggest impact on Aerojet shares because it gets most of its revenues from space.”

Byron Callan, a defence analyst with Capital Alpha, believes that it is far from certain that the biggest players in the industry will reap a bonanza.

“There are some elements in the announcement that could cut different ways,” he says. “You will have to wait until the fiscal year 2020 budget comes out and then for Congress to enact it – that could take all of 2019. There are a lot of branches in the decision tree and if Congress does allow it, you will have to ask where the money is coming from.”

One possibility, he adds, is that the cash could be found from other parts of the defence programme such as the F-35 fighter jet project. “You could be robbing Peter to pay Paul.”

He sees the other threat to major defence companies as the emergence of newer niche companies such as SpaceX. “There is a pretty vibrant venture activity in this new space and this could create opportunities for companies who might be very disruptive to heritage contractors.”

Jonathan McDowell, an astronomer at the Harvard Smithsonian Centre for Astrophysics, does believe that it could generate more spending, but he questions how necessary it really is.

“The trouble is it means different things to different people. The White House has one vision of Space Force and the military has a different view.

“The military sees it as a better career path for people who want to specialise in space. At the moment it is the fighter pilots who are getting all the plum jobs. But once you have an independent bureaucracy, it will want to justify itself. It will see itself as a rival to the Air Force and want a comparable budget. While it would have some positive impact on some military careers, it will also generate unnecessary budget waste.”